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1.Market Observations, 8.Was Sticky

19 Dec 2016 (AFR) – Ronald Reagan (Reaganomics) warning for Donald Trump bull market

(19 December 2016, AFR, p20, by John Kehoe)

‘As the Trumpflation trade pushes the Dow Jones Industrial Average within a whisker of an historic 20,000 points, there is a cautionary lesson for investors from the stock market ride during the Ronald Reagan presidential era. Trumponomics and Reaganomics have striking parallels. The TV and movie celebrities turned Republican leaders both pledged huge tax cuts, to gut stifling regulation and to pump up defence spending. Yet the 1980s bull market that Reagan ultimately presided over was not a straight line up. After rallying as much as 8.5 per cent by late November in the weeks after Reagan’s famous victory, the S&P 500 crashed 20 per cent from its peak during the Republican president’s first calendar year. It slumped further in 1982 during a recession.’

Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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